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Educational Attainment, Growth and Poverty Reduction within the MDG Framework: Simulations and Costing for the Peruvian Case

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Listed:
  • Gustavo Yamada
  • Juan F. Castro
  • Arlette Beltran
  • Maria A. Cardenas

Abstract

We propose a model that accounts for the potential feedback between schooling performance, human capital accumulation and long run GDP growth, and links these results with poverty incidence. Our simulation exercise takes into account targets for education indicators and GDP growth itself (as arguments in our planner's loss function) and provides two conclusions: (i) with additional funds which amount to 1 percent of GDP each year, public intervention could, by year 2015, add an extra 0.89 and 1.80 percentage points in terms of long-run GDP growth and permanent reduction in poverty incidence, respectively; and (ii) in order to engineer an intervention in the educational sector so as to transfer households the necessary assets to attain a larger income generation potential in the long run, we need to extend the original set of MDG indicators to account for access to higher educational levels besides primary education.

Suggested Citation

  • Gustavo Yamada & Juan F. Castro & Arlette Beltran & Maria A. Cardenas, 2008. "Educational Attainment, Growth and Poverty Reduction within the MDG Framework: Simulations and Costing for the Peruvian Case," Working Papers MPIA 2008-05, PEP-MPIA.
  • Handle: RePEc:lvl:mpiacr:2008-05
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    References listed on IDEAS

    as
    1. Gustavo Yamada, 2007. "Retornos a la educación superior en el mercado laboral: ¿vale la pena el esfuerzo?," Diagnóstico y propuesta, Consorcio de Investigación Económica y Social.
    2. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    3. World Bank, 2004. "Ecuador - Creating Fiscal Space for Poverty Reduction : A Fiscal Management and Public Expenditure Review, Volume 1. Main Report," World Bank Publications - Reports 14515, The World Bank Group.
    4. Francois Bourguignon & Francisco H.G. Ferreira & Nora Lustig, 2005. "The Microeconomics of Income Distribution Dynamics in East Asia and Latin America," World Bank Publications - Books, The World Bank Group, number 14844, December.
    5. Gustavo Yamada & Juan Francisco Castro, 2007. "Poverty, inequality, and social policies in Peru: As poor as it gets," Working Papers 07-06, Centro de Investigación, Universidad del Pacífico.
    6. -, 2002. "Meeting the millennium poverty reduction targets in Latin America and the Caribbean," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2349 edited by Eclac.
    7. Oscar Dancourt & Félix Jiménez & Waldo Mendoza & Eduardo Morón & Bruno Seminario (ed.), 2004. "Modelo de análisis de políticas macroeconómicas para la economía peruana," Books, Fondo Editorial, Universidad del Pacífico, edition 1, volume 1, number 04-02.
    8. Juan F. Castro & Gustavo Yamada, 2006. "Evaluación de estrategias de desarrollo para alcanzar los objetivos del milenio en América Latina," Working Papers 06-11, Centro de Investigación, Universidad del Pacífico.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

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    More about this item

    Keywords

    Millennium development goals; education; human capital; GDP growth; poverty; Peru;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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